Shell said to weigh sale of over $1 billion Malaysia LNG stake

THE HAGUE (Bloomberg) -- Royal Dutch Shell Plc is considering a sale of its stake in a Malaysian liquefied natural gas export plant, which could fetch more than $1 billion, people familiar with the matter said.

The Anglo-Dutch energy giant is gauging interest in its 15% stake in MLNG Tiga Sdn., which owns an LNG terminal in Sarawak on the island of Borneo. Malaysia’s state-owned Petroliam Nasional Bhd., which holds 60% of MLNG Tiga, has pre-emptive rights on the stake.

The sale may draw interest from private-equity firms. MLNG Tiga, set up in 1995, is the third plant to be built in the Petronas LNG complex in Bintulu, Sarawak, according to its website. The plant has a production capacity of 6.8 million metric tons a year.

The sale is part of Shell’s plan to raise $30 billion from asset sales in the three years through 2018 to help cut borrowings after its acquisition of BG Group Plc prompted Fitch Ratings Ltd. to lower its credit rating. The company’s total debt ballooned to $90.3 billion at the end of June, from $52.9 billion a year earlier, data compiled by Bloomberg show.

Shell sold more than $20 billion of assets in 2014 and 2015 combined, Chief Executive Officer Ben van Beurden told analysts in February. Europe’s largest oil company by market value will likely see less than $10 billion of disposals this year, he said.